What’s in the Integrity and Public Ethics Bill?

 

1. Objectives of the Bill

More than twenty years after the enactment of Law No. 25,188 on Public Ethics (the current Law), the Anti-Corruption Office (the “OA,” after its acronym in Spanish) has submitted the Integrity and Public Ethics Bill (the Bill) to public consultation. This is the second bill drafted to that end. In 2019, work had also been done on a bill to replace the current Law.

The Bill aims to make a series of changes to current regulations, introducing some novel points and intends to systematize the Public Integrity System which is dispersed in several regulations.

The Bill is subject to receive suggestions and proposals by interested parties for a term of 180 days. The Bill and the applicable procedure for the submission of suggestions and proposals can be found at https://www.argentina.gob.ar/noticias/elaboracion-participativa-del-proyecto-de-ley-de-integridad-y-etica-publica (in Spanish). Once this procedure is completed, the Bill, with the introduced amendments, will be submitted to Congress for approval.

2. Scope of the Bill

The Bill, like the current Law, aims to apply to the three branches of Government. After providing the principles governing ethics and public integrity, as well as the rights and obligations of public officials, it also seeks to extend its scope of application and control compared to the current Law, with respect to: (i) standing and situations covered, (ii) the quantity and quality of the controls applicable to governed persons, (iii) the obligation of certain individuals who are not public officials to file sworn affidavits, (iv) the broadening of the scope of situations of conflicts of interest, (v) the provision for a vesting period once the public function is terminated, (vi) the  gifts and entertainment regime, and (vii) the extension and diversification of the powers of the enforcement authority in matters of prevention and registration.

1. Concept of Public Official

The Bill includes the development of the concept of “Public Official” under the interpretation that has been developed by the OA and the Attorney General’s Office (Procuración del Tesoro de la Nación). Thus, its definition includes any person elected, appointed or hired to perform public functions, regardless of that person’s rank or denomination, but focusing on the public function he/she performs.

2. Sworn Affidavits

One of the most significant changes with respect to the current Law is the filing of sworn affidavits (“DDJJ,” after its acronym in Spanish), both with respect to public officials’ assets and for the control of incompatibilities and conflicts of interest.

The Bill mandates public officials to file their DDJJ of assets and extends the obligation to persons who work in agencies that award, grant permits and otherwise control activities by the Government, regardless of their rank, among others.

The Bill also imposes the obligation to file the DDJJ on certain individuals who are not public officials or who do not perform a public function. Thus, any person who is a candidate for Federal elective public office or for positions whose appointment requires the intervention of any of the Houses of Congress or its Committees is obligated to file the DDJJ of assets as well.

The Bill expands and updates the information required in the DDJJ. It extends from one to three years the period to declare activities, labor and professional background prior to the beginning of the exercise of the public function. Likewise, it establishes that, in the case of the provision of professional services, the governed person “must declare those firms to which he/she belongs or belonged, as well as the clients he/she had within the last three (3) years prior to the exercise of the public function."

Failure to file the DDJJ may result in the suspension of the receipt of twenty percent (20%) of the net monthly salary of the respective official.

3. Conflicts of interest

The Bill provides that a conflict of interest exists when "the public interest collides or may collide with the private interest, whether it is of an economic nature or not, in relation with the person exercising the public function." With that definition, it establishes that conflicts may be actual, potential or apparent: (i) actual, when there is direct concurrence between the duties of public officials and their private interests, (ii) potential, when it is circumstantial, that is, when the public official has private interests that could concur with the public interest, and (iii) apparent, when "there is a general perception that the decision adopted by the person exercising the function could be affected by partiality."

It also establishes certain ways to prevent conflicts, detailing that public officials, for example, may not carry out activities or own shares in a private company over which they have any kind of influence in the exercise of the public function. If, prior to entering the public service, the public official is involved in a conflict of interest, he/she must resign or cease the activity. Regarding potential conflicts, it prohibits taking part in matters involving individuals with whom he/she has or has had any sort of relationship, with a view to his/her work after the public function. For apparent conflicts, it suggests mechanisms of information and accountability in order to provide transparency in the exercise of the function in question.

The acts issued with the intervention of an official in conflict of interest is annullable by the Administration, beyond the additional sanctions that may apply to the intervening official.

4. Vesting period upon leaving public office

The Bill extends from one to two years after leaving public office the period during which the public official may not engage in any activity with which he/she may incur in conflicts of interest related to his/her public activity.

The vesting period was not provided for in the current Law. It was only provided for in Decree No. 41/1999 applicable to the Federal Executive Branch.

On the other hand, it sanctions with the inability to contract for two years with the National Public Sector to any person, natural or legal, that hires a former public official during the two-year vesting period.

5. Gifts regime

Without major changes with respect to the content of the current regulations, the Bill seeks the systematization in a single rule of the regime of gifts and presents in force for federal authorities, which today is scattered among the current Law, the Code of Public Ethics, and Decree No. 1179/2016. In addition, the prohibition and exceptions regime extends to partners and underaged children of high-ranking officials of the three branches of the Government and the Office of the Prosecutor General and of the Defender General.

6. Enforcement authorities

The Bill creates the “National System of Public Ethics,” for the design, promotion and implementation of public policies of integrity, ethics and transparency. Within this system, it creates Integrity and Public Ethics Offices within the three branches of Government and the Office of the Prosecutor General and of the Defender General, requiring them to file annual reports with Congress.

With regard to registries, it creates, on the one hand, the Registry of Interest Management Activity, where hierarchical officials must register their activities and, on the other hand, the Registry of Non-Compliant Persons, where any breach of the law will be registered. These records must be consulted by the different areas of Government prior to the hiring or promotion of personnel. At the interjurisdictional level, the Bill creates the Federal Fund for Integrity and Transparency, as a permanent body that seeks a space for interaction among the different jurisdictions.

7. Filing of DDJJ of interests by suppliers and contractors

The Bill establishes the obligation of all Government suppliers and/or contractors to file DDJJ of interests, under penalty of being excluded from the corresponding contracting procedure.

However, the range of officials with respect to whom the sworn affidavit must be filed is so broad that it could make it impossible to fulfil or lead to unintentional inaccuracies. The Bill expressly provides that the DDJJ must be filed with respect to the entire list of officials included therein “even if they had no power to decide on the contracting or act in question.”

With respect to private sector persons covered by the obligation, it includes those who have had any of the connections mentioned in the regulation with any of the officials covered, either currently or during the last calendar year. The obligation reaches “legal representatives, controlling or controlled companies or with direct interest in the economic or financial results, directors, partners or shareholders who have participation, by any title, suitable to form the corporate will or who exercise a dominant influence as a consequence of shares, quotas or parts of interest owned."

3. Conclusions

The Bill could grant legal hierarchy to certain points that are currently regulated in lower-ranking regulations, thus establishing a legal minimum for all branches of Government.

However, some of the issues regulated by the Bill must be delimited and clearly outlined so that the broadness of the terms and scope of application does not end up conspiring against its effective compliance.

We highlight the process of participatory drafting of the Bill as an opportunity for improvement and precision, so that the law to be finally enacted is applied in the most effective and efficient way possible.

To see the Bill, please click here (in Spanish).